After facing several challenges in recent years, including two deadly crashes and the COVID-19 pandemic, Boeing Co is determined to bounce back. Boeing plans to restore production of its bestselling 737 MAX jet to pre-pandemic levels of 52 a month by January 2025, according to a report from Reuters. This ambitious goal is part of Boeing’s strategy to fully recover and maintain its position in the competitive aviation market.
Stepping Up Production Rates
Boeing currently builds 31 737 MAX jets a month but aims to increase this number to 38 by June. According to sources, the company’s plans include reaching a production rate of 42 MAXs a month by January 2024 and 47 by June 2024. Although Boeing had previously mentioned its goal of returning to around 50 by 2025 or 2026, these more specific ramp-up plans have not been publicly reported until now.
Despite these ambitious plans, Boeing has not provided further details and declined to comment when approached.
Critical Task for Boeing’s Commercial Airplanes Division
Achieving faster rollouts of the lucrative MAX jets is considered the most critical task for Boeing’s Commercial Airplanes division and its CEO, Stan Deal. Deal announced in March that production rates would rise from the current rate of 31 jets “very soon.”
Reaching the production rate of 52 jets per month by January 2025 would mark the first time Boeing has achieved this volume since 2019 when it reduced its monthly production to 42 planes following the crashes. The rate was further reduced during the COVID-19 pandemic.
Defending Market Share Against Airbus
If Boeing can successfully achieve its production goals, it will allow the company to defend a 40% market share of the narrowbody market, which analysts believe is the minimum level required to maintain a duopoly. This is particularly important as European rival Airbus also increases single-aisle production.
Airbus, which recently announced plans to build a new production line in China, expects to produce 65 single-aisle jets a month by the end of 2024 before ramping up to its ultimate target of 75 a month in 2026.
Balancing Ambition and Supply Chain Challenges
While Boeing’s plan seems “relatively realistic” according to Michel Merluzeau, an aerospace analyst at Air consultancy, Richard Aboulafia of AeroDynamic Advisories believes Boeing’s market share could further shrink in the latter part of the 2020s if Airbus continues to see robust sales of the A321neo.
Another key factor to consider is the health of Boeing’s supply chain, which is currently struggling to hire and train workers, leading to parts shortages. As Boeing’s hiring efforts start to bear fruit, 737 MAX production appears to be stabilizing, said Merluzeau. However, both Aboulafia and Merluzeau emphasized the need for the company to ensure its small suppliers remain financially healthy amid economic pressures.
Boeing’s ambition to restore its 737 MAX production to pre-pandemic levels by 2025 demonstrates the company’s determination to overcome past challenges and secure its position in the competitive aviation market. With careful management of its supply chain and a focus on quality, Boeing aims to regain customer trust and maintain a strong presence in the industry.
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